My Grandmother’s Advice That’s Still Relevant Today

My grandmother never had a lot of money, but she always managed to have enough to put food on the table and to pay every bill on time.

Here are a few of the things I learnt from her. Not all of them have to do with money, but they’re all drawn from an everyday life of hard work, thrift and “keeping the wolf from the door”!

Save for a “rainy day”

Have an emergency fund. Unexpected things happen. My grandmother couldn’t go running to the bank for an emergency loan or overdraft. Always have something to “tide you over” in the food cupboard and the money pot.

“Make-do”

The most important things every month are our savings and to pay the rent or mortgage. The rest is a luxury. There’s always a new way to spend money, but the secret is in making-do with the things around us which we already have or which don’t cost much.

“Waste not, want not”

“Want” in the sense of not having something that you need. Cook at home, use left-overs, never throw food away, learn basic recipes that are cheap to prepare and filling and nutritious. Don’t throw money away on anything unnecessary.

“Look after the pennies, and the pounds will look after themselves”

It’s all those small expenditures that we might think are nothing that can really add up and make the difference between staying within budget or blowing it out of the water! “A penny saved is a penny earned.”

“Don’t go throwing your money around”

Let’s not go around thinking we’re millionaires and spending as though we were! Let’s not “live a life of luxury” that we can’t afford. Otherwise we’ll never be a millionaire!

“It’s not what you spend, it’s what you don’t spend”

Spending money doesn’t make you rich, even though it might make you feel rich… for a while. It’s all about what you don’t spend!

“While you’re earning, you’re not spending”

Keep yourself busy at work, and you’ll have less time to go out spending money on things in the shops, meals out, etc. Double positive effect on your finances. Many people with partners who don’t work don’t worry so much about the loss of income, but rather the extra expenses from them having so much free time on their hands!

“Never put things on the never-never”

In other words, don’t buy things that you can’t afford to pay for in cash. Never take credit for anything except a mortgage.

“Pay for everything in cash. It’s cheaper!”

Paying interest when you buy something makes it an expensive purchase.

“You have to earn your keep”

Nothing is for free, and free-loading is not allowed. It’s unfair on the rest.

“Everyone has to do their bit”

Everyone in the family has to do what they can, whether it’s helping around the house or bringing in a bit of extra income to put on the table every month add to the family savings account.

“There’s no such thing as a free lunch”

Don’t expect anything for free in this life. You have to work for it!

“Rome wasn’t built in a day.”

It takes patience to acquire the comforts of life. You probably won’t get rich quickly, but if you’re careful, you might just get rich slowly.

“Where there’s a will, there’s a way”

If you really want to achieve something, you’ll find a way to do it. whatever the obstacles.

“If at first you don’t succeed, try, try, try again”

Don’t give up, even if you fail a few times to start with. If you keep trying, you’ll succeed in the end.

“If a thing’s worth doing, it’s worth doing well.”

Don’t waste your time doing things “half-heartedly”.

“Don’t do things by halves.”

If you’re going to do something, give it your all! Otherwise, what’s the point!

“There’s a time and a place for everything.”

Doing the right things at the right times is crucial. This involves prioritising and focusing on one thing at a time.

“A miss is as good as a mile.”

If you narrowly fail, you’ve still failed! Make sure you succeed by working on whatever you’re doing as hard as possible. And never give up!

“Neither a borrower nor a lender be.”

This actually comes from ‘Hamlet’ which my grandmother probably never read, but this quotation was very much in use in her generation. It speaks for itself.

“Lend your money and lose the friend.”

Lending money to other people is fraught with difficulties. It’s better to help them find a job or to give them good, solid financial advice. If a loan comes too easily, your friend could well be in the same or greater difficulties later on and then you’ll never get your money back, which will sour the friendship forever.

“Don’t put all your eggs in one basket.”

Don’t bank everything on one thing! Diversify!

“Pull yourself up by your bootstraps.”

This is the old philosophy of self-help to get ahead in life. Still very valid today.

“You got yourself into it, you get yourself out of it.”

As far as I can tell, this one was my grandmother’s own invention. Don’t expect other people to bail you out of problems of your own making.

“Beware of Greeks bearing gifts.”

If someone gives you something, the chances are they want something (usually a lot more) in return. Beware! Look what happened to Troy!

“In the olden days… ”

My grandmother used to use this phrase when she was telling me how good things were now compared to when she was growing up during and after the First World War. Tough times!

“Having a whale of a time.”

For my grandmother, this meant the simple joys in life like having the family round for a few hours, playing cards or a board game, going for a walk in the park… None of these things really cost anything. No flashy cars or expensive jewelry for her! Sometimes, she would even spoil herself and buy an ice cream!

I’m sure there are loads more adages and common sense sayings out there that our grandmothers taught us. Please feel free to send us yours and we’ll add them into this article and give you credit for them.

If you need gclubpros , then the team of professionals from gclubpros is here to help you.

Looking for Money in All the Wrong Pockets

An incident happened this past week in which I am still scratching my head. Have you ever known you had something, but for the life of you could not find it? I will accede to the fact that occasionally, I do have a streak of absent-mindedness running through me. At times, I wish it would just walk.

I was fairly certain I had an extra $20 in one of my pant’s pockets. It was what I affectionately refer to as my “mad Money.” My wife would be mad if she knew I had it. I do not remember where it came from but my real problem was, I could not find those pants.

Usually, if I find money in my pants pocket there is only one explanation. I’m wearing somebody’s pants, but not mine. The truth is, my pants rarely see any extra money. If there is an occasion when I do have money in my pocket, my pants get all excited and wrinkly.

Only this was different. I distinctly remember putting a $20 bill in one of my pants pockets and thinking what I could do with it. But now, I cannot find it. I knew I had an extra $20. I distinctly remember putting it somewhere. I’ve looked everywhere… maybe I should have looked somewhere.

With the aimless look on my face, more aimless than normal, I wandered the house in search of the missing $20. I tried to act inconspicuous so the Gracious Mistress of the Parsonage would not discover what I was doing.

Obviously, no Emmy award will come my way because my acting inconspicuous was a complete failure.

“What are you looking for?” My wife queried.

“Nothing,” I stammered.

“When you find it, let me know. I really don’t know what nothing looks like.”

Ha. Ha. Ha. Sometimes she thinks she is a comedian. However, I was not laughing. If I find that money, the joke will be on her. Then we will see who is laughing.

I had two fears facing me at this point. First, she could have found the money and was waiting for me to admit that I actually had some extra money. This would invite a great deal of grief on top of my balding head.

Second, if I told her I was looking for money she would want to know where I got extra money. If I cannot remember where the money is, how in the world am I going to remember where it came from?

Then, she would want to know how much more money I had misplaced somewhere in the house. Actually, I want to know that myself.

Such interrogation from her borders on waterboarding. If the FBI wants to learn a thing or two about torturing people, they could learn an awful lot from her. She can torture a person and not lay a glove on them. Of course it is not her glove I am worried about, it is her evil eye that goes through a person, me in particular, like a laser beam.

My wife always knows when I’m lying. My lips are moving.

Coming back to the missing $20. I could offer to split it with her if she would help me find it, which would leave me with $10. $10 in the hand is worth more than $20 that I do not know where it is.

Then, I would have to explain what I needed $10 for at the time. Christmas is over and her birthday and our anniversary are a long way off, so I cannot tell her I want to buy her a present.

I did have plans for that $20. Now, I cannot even remember what those plans were. Maybe, if I knew what I planned to do with the $20 I might remember what I did with the $20.

While I was musing on this situation, I discovered a correlation between money and love. Without love, you end up with a broken heart. Without money, you just end up broke.

Then out of nowhere, and I mean nowhere, an idea entered my head. I remembered wearing my brown suit when I got $20. I went to my closet, but the suit was not there.

“Have you seen my brown suit?” I asked my wife.

“Yes,” she said rather absent-mindedly, “I sent it to the dry cleaner. Why do you ask?”

Then, with a little smirk dancing on her face, she asked, “You weren’t looking for $20, were you?”

The only thing I hope is that I do not remember where the $20 came from or what I planned to do with it. I guess a freshly dry cleaned suit is worth $20.

Seeking that money reminded me of a verse of Scripture. “But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you. Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof” (Matthew 6:33-34).

Then another verse. “Seek ye the LORD while he may be found, call ye upon him while he is near” (Isaiah 55:6).

No matter how hard you search for something, if it is not there, you will never find it. But with God it is a different story. When we truly seek him, we always find him.

Understanding “Income Purpose” Investing

After 45 years of investing, I’ve come to the conclusion that the equity (or growth purpose) market is a far easier medium for investors to understand than the far safer, and generally less volatile, income purpose securities market. As counter intuitive as this sounds, experience supports the premise.

“Understanding” boils down to the development of reasonable expectations: just how do you expect the market value of your income purpose securities to react to varying market, interest rate, economic, political, atmospheric, and “other” conditions”… and, does it really matter?

Few investors grow to love volatility as I do, but most expect it in the market value of their equity positions. When dealing with “income purpose” securities, however, neither they, their guru/advisors, nor market commentators are comfortable with any downward movement whatsoever.

Not to make excuses for them, but most professional and media folk think in terms of the individual bonds and other debt securities that Wall Street markets to brokerage firms and other large investment entities. Bond traders hate to discount their inventory due to higher interest rates… it’s bad for year end bonuses. But their bond market disaster is the individual investor’s opportunity to buy the same amount of income at a lower price.

Most investors are also more receptive to loss taking advice on income securities than they are with respect to equities… always the effect of a “market value” rather than an “income production” focus… and a well kept Wall Street secret.

The list below describes some important characteristics and concepts involved with investing in income purpose securities. Familiarization with these will aid in the development of valid “performance” expectations. Doing so will also help develop an appreciation of this important (and somehow not too often mentioned) relationship: changing market values (in either direction) rarely have any impact on the income being generated by the security.

Confucius say: keep your eye on the ball, you can’t buy groceries with market value or total return, only income pays the bills… without depleting sacred capital

General attributes of income purpose securities:

They generate a predictable stream of interest, dividend, rent, royalty or other income.
They pay income in specific amounts on specified dates.
Their risk of financial loss varies dependent upon security type, issuer quality, and maturity, BUT, all normal income securities are considered far less risky (financially) than the common stock of their respective issuing entities. State government paper is less risky; federal government issues carry no financial risk at all.
The purpose of the income asset allocation of an investment portfolio is the production of income in an amount large enough to assure: annual growth of income producing capital and annual growth of income production.
High dividend common stocks (utilities, etc.) are not included within the income purpose security definition, although they may be less risky than other equities.
Bonds, loans, and other interest bearing securities are issued by both corporations and government entities and have maturity dates upon which the principal is returned to investors.
Income securities that are guaranteed as to principal and interest, or protected by “safety mechanisms” of any kind always bear a lower yield than otherwise similar securities.
Generally, fluctuations in market value have nothing to do with the financial viability of the security issuer. Most often, they are the result of anticipated changes in the direction of interest rates, or the tax code.
Any form of either market value or total return performance analysis in a predominantly income purpose investment portfolio is counterproductive, at best… particularly when comparisons are made with any form of equity index.
Bonds, mortgages, notes, and other “debt” instruments are generally illiquid securities with wide price “spreads”, and difficult to either sell at “statement” prices or add to from the marketplace.
Income closed end fund portfolios are liquid containers for illiquid securities, thus eliminating the major drawbacks of owning individual bonds, mortgages, loans, etc.
Higher interest rates (lower prices) are good for income investors because they produce higher yields from new (and existing) securities that are available for purchase.
Lower interest rates (higher prices) are good for income investors because they can provide “reasonable” profit taking opportunities on securities already owned.
A reasonable trading profit on an income purpose security is anything in the neighborhood of “one year’s interest in advance”, keeping in mind that three 7s always beat two 10s.

Theoretically, income purpose securities should be the ultimate “buy and hold” security blanket within retirement income portfolios. But if you examine the average retirement portfolio, especially 401k portfolios, you would find a remarkable low “income purpose” asset allocation. This seemingly nonsensical behavior is as much the result of government regulation as Wall Street manipulation. For example:

The Vanguard Retirement Income Fund (VTINX), with nearly $17 billion in assets, is one of the most popular and well respected of all funds in retirement income portfolios, particularly 401ks. The five individual funds inside yield just 1.75% in actual spending money to investors… but they are dirt cheap.
A diversified portfolio of income purpose Closed End Funds (CEFs), with payment histories stretching back more than twenty years, would yield well in excess of 7.00% after somewhat higher expense (that the security owner never actually pays).
CEFs are never found in 401k plans and rarely appear in IRA and other retirement portfolios created by investment professionals; please tell me if you know why.
Confucius say: if you buy cheap, you get what you pay for

The focus of an income purpose portfolio needs to be: the amount of realized, spendable, income produced irrespective of market value fluctuations. The operative investment management objectives need to be: growing both the productive working capital and the spendable “base income” produced by the portfolio.

Wall Street has you believing that lower market values are always bad and that higher prices are always good. This is the conventional wisdom we’ve all had thrust upon us for decades. But price volatility is the very nature of securities markets, the very reality that creates both buying and profit taking opportunities, particularly in income purpose securities.

Higher income purpose security prices mean lower yields, but also increased realized profit potential; lower income purpose security prices mean higher yields and buying opportunities. I see no bad or good; just the opportunity created by either scenario. (The same is true, incidentally, with Investment Grade Value Stocks.)
It is the inherent safety (i.e., lower risk of financial loss) of income purpose securities (and IGVSs) that creates this almost perfect relationship. Price volatility is always good.

“It’s OK, it’s natural, every market value fluctuation is satisfactual” is what I’ve been singing for decades… particularly since the creation of income CEFs. Rarely, even in the three major meltdowns of the past 40 years did any high quality company or government entity default, regardless of tremendous price fluctuations in all securities. Each time, the vast majority of CEF income payments kept rolling in, unscathed by the surrounding chaos.